IAS: Home Prices Leveling Off

Denver, Colorado-based ""Integrated Asset Services, LLC"":http://www.iasreo.com (IAS) says its latest study on home prices indicates some return to normalcy in markets that have been hit hardest by the housing downturn. The company's ""IAS360 House Price Index"":http://www.iasreo.com/ias360_update.html for April reflects the first non-declining numbers in 10 months. In fact, IAS said nationally, home prices moved up a fraction of a point in April.
Dave McCarthy, president and CEO of Integrated Asset Services, said, ""It's too soon to call this a turn in the housing market, particularly given all the political and regulatory uncertainties. I think that we're still in for some difficult spells ahead, but we are seeing a certain kind of pricing equilibrium in several important markets. That's encouraging for the long term.""
On a year-over-year basis, U.S. house prices are still down 13 percent, but IAS says the voltatility of the trend line is less than the previous year. The company reports that three of the four census regions in its study were stable to positive for April. Only the South, which includes several particularly hard-hit Florida communities, was down for the month (-0.3 percent), but there too, IAS said, the trend line is flattening. The IAS360 has fallen more than 19 percent from its high-water mark in June of 2007.
According to Rick Foos, president of real estate valuation company ""SRA Foos & Associates, Inc."":http://www.foosappraisals.com, the lower prices have helped to reduce inventory levels. ""...the number of sales and pending sales are both increasing. This is primarily in the lower price areas where the incentives appear to be having an impact, along with low interest rates, but it is also having a positive effect psychologically on the entire market,"" Foos said.
Foos notes, though, that two factors could reverse the positive sales trend - increasing interest rates and a significant increase in the number of foreclosures. ""If those two items hit in tandem, then we could be seeing a 'false bottom', but if neither materializes to a great degree then it does appear that the market may have bottomed,"" Foos said.
Among metropolitan statistical areas (MSAs), the IAS360 report shows that three of the country's 10 largest MSAs — Boston, Chicago, and San Diego — joined Denver in positive territory in April. Denver was the only region in the nation showing gains in IAS's previous report. IAS said its data also revealed certain evidence of normalization, or at least a return to seasonality, in California. Counties up and down the state continue to exhibit price upticks in IAS' study, with San Diego now reporting three straight months of stable prices.
Integrated Asset Services reports on neighborhood level house price trends, residential market climate, and collateral valuation, leveraging real-time data and nationwide resources.
McCarthy said, ""We're looking at daily information on more than 15,000 market segments across the country, and we're keeping a keen eye out for trends all the way down to the county and neighborhood level. With the benefit of our uniquely granular and more timely data, the IAS360 will report the turn in the market first.""